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Canada Agribusiness Report Q2 2009Published by: Business Monitor International Published: Apr. 27, 2009 - 51 Pages Table of Contents
AbstractIn BMI's Canada Agribusiness Report for Q2 2009, we introduce the new Business Environment section.This section gives an overview of the agriculture and fisheries industry in Canada, and its significance tothe overall economy and labour market. We discuss the industry's key sectors, including aquaculture, andalso cover government support available to agriculture in the country. Canada's agricultural sector's woes will continue in 2009, as prices for its key agricultural exports of grainand livestock fall. While farmers are expecting a bumper grain harvest this year - we expect wheatproduction to be up 48% on the 2008 level - this will be offset by the lower prices. Despite a smallbounce at the beginning of the year, we do not expect wheat prices to recover in 2009. This will be a cruelblow for farmers who missed out on some of the high prices of early 2008 owing to a disappointingharvest and allocated extra planting area for wheat for 2009's crop. It is the livestock sector that has been suffering the most in recent years, however. In January 2009, thebeef cow inventory was down 6.6% from the year before and the number of calves born down 4.3%. Thehog situation was even worse, with the number of pigs on farms down 10.2% in January 2009, comparedto January 2008. This followed on from a 7.4% fall the previous year. Pig farmers have been hit by acombination of falling prices for pork, while the price of input costs such as fuel and feed was risingrapidly. The pressure on profits was too much for many smaller farmers and between January 2007 andJanuary 2009, almost a quarter left the industry. There are hopes that now inventories have been lowered pork prices in North America may begin to riseagain, and that this combined with the falling cost of inputs could drag the pork sector back intoprofitability. However, with world demand for meat likely to be sluggish in 2009, we are not banking onany major turnaround just yet. The government has launched a number of measures to help the sectorthrough the tough times, including changing the rules of its Advance Payments Program to allowlivestock farmers suffering from 'severe economic hardship' to borrow up to CAD400,000, with theirlivestock inventories as security. The Saskatchewan provincial government has also stepped in to helplivestock farmers in the province with a CAD71mn support package. While we do not see any major turnaround in the livestock sector in the next few years, in other sectorswe expect to see strong growth once the world economy recovers. Canada will be able to benefit fromstrong demand growth for grain in emerging markets and the government's commitment to use renewablefuel in gasoline should drive demand for grain-based ethanol at home. Get Full Details About This Report >> |
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